Howes: Detroit, Silicon Valley meld in next-gen vehicle

Forget the figurative line separating today’s auto industry hardware from the high-tech software of computing, data and communication.

It’s a distinction without a meaningful difference, judging by the lineup for this year’s Detroit auto show opening Sunday to media from around the world. The exception is the sharply higher market valuations investors place on the likes of Apple Inc., Intel Corp. and Google parent Alphabet Inc.

Those numbers, and prevailing market sentiment less than nine years after two of Detroit’s three automakers gutted through bankruptcy, are very real. They’re what’s really pushing this town’s automakers and its foreign rivals in the race for competitive position in mobility, autonomy and electrification, the trifecta of next-century Auto 2.0.

“The pathway to get all of us to this world requires integrating the software expertise of Silicon Valley with the systems safety and manufacturing expertise of Detroit and our teams around the world,” GM said in its 2018 Self-Driving Safety Report, issued early Friday. “With safety at the core, we are ready to take the next step.”

Welcome to the new reality — for Detroit’s auto show, its auto industry and for its competition in Japan, Germany, South Korea, even China, now the world’s largest market. As much as this year’s show will feature new, profit-rich pickup offerings from Detroit’s Big Three and solid products from Volkswagen AG, Toyota Motor Corp. and Nissan Motor Corp., expect the business buzz to be all about mobility technology.

“The technology end of it is the end-all,” says Rod Alberts, executive director of the Detroit Auto Dealers Association and the North American International Auto Show.

The question is not whether cars and delivery vans will drive themselves. It’s how soon, how regulators will react, how quickly the public will adapt, and how successfully century-old automakers can compete in a rapidly evolving space changing with Silicon Valley speed.

And the future of the auto industry, as well as its ancestral home here? Arguably brighter than it’s been in decades, precisely because the technological innovation enabling mobility services and self-driving vehicles is finding its way into the vehicles the industry has a century of experience building. That counts for something, as Tesla Inc.’s manufacturing and quality struggles attest.

It’s also an enormous challenge. The revolution in transportation technology offers automakers potentially new revenue and profit streams. But the proliferation into ride-sharing and car-sharing schemes threatens to undercut sales and weaken profit models rebuilt after the Great Recession.

That’s why the techification of the Detroit auto show is so much more than symbolism. For the second year in a row, the annual extravaganza at Cobo Center will feature “Automobili-D. ” The tech bazaar is proving able to draw enthusiastic start-ups and venture-capital investors, uniting the Old Economy auto industry with the Silicon Valley ethos.

More than 140 exhibitors are expected at this year’s Automobili-D, up from 100 last year. At least 100 companies have asked to join “match meetings,” a program sponsored by the Michigan Economic Development Corp. that pairs start-ups with would-be investors.

The chatter on Detroit and the opportunity its defining industry can offer is changing. Some of the nation’s leading engineering universities, from Michigan in Ann Arbor, to Stanford, Pittsburgh’s Carnegie Mellon University and the Massachusetts Institute of Technology are expected, too, signaling the auto industry’s shifting demands for talent.

That’s unambiguously good news. Change? Yes. Challenge? Yes. But it’s the makings of an all-new chapter for a city (and its hometown industry) whose name for too long has been synonymous with American industrial decline. The melding of automaking with advanced technology, on display next week, is opportunity.

And it’s coming quickly. GM says its Cruise AV will be on the road next year. Electronic architectures for both traditional cars and trucks and electrified vehicles are growing enormously sophisticated. Add self-driving capability, as the industry and its tech rivals are pushing to do, and the demands grow.

Aptiv PLC, the automotive electronics offshoot of Delphi Automotive PLC, ships customers some 40 billion lines of computer code per day in parts, components and subsystems, says Jada Tapley, vice president of advanced engineering and external relations. Within just two years, the supplier expects to be shipping 150 billion lines of code per day.

That’s your new auto industry, and it’s coming — ready or not.

Daniel.Howes@detroitnews.com

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